A Lasting Legacy

Why planning for long-term care is so necessary in today’s world

James and Irene Norris spent their lives surviving. The two owned and operated a small business together for over 60 years, surviving the stock market crash, the Great Depression, seventeen U.S. Presidencies, and two World-Wars. All while raising two sons.

But there was one thing they didn’t plan on: long-term care.

Once they closed their small business and became too frail to care for each other, they became trapped in an unfortunate financial situation that is becoming all too common today. After several medical problems, they were forced to choose some sort of custodial care and they moved into a nursing home. Even though they had savings, it quickly disappeared when faced with the monthly nursing home costs. Medicare offered little support, because it does not cover stays in nursing homes for extended periods of time.

The bills continued to come and they soon realized they no longer had adequate financial resources to survive. They reached a turning-point and, after working their whole lives, they were forced to make the most painful decision of their lives. In order to qualify for Medicaid, they would not be able to hold onto all of their resources. They had to sell everything they worked so hard to earn, in order to receive Medicaid. Their prized possessions that had been so carefully collected through the years were gone in an instant, sold to pay the medical bills that had piled up.

Part of the reason they had to sell was because of Medicaid requirements, but much of their selling was due to a lack of planning. The Norris family had never consulted a financial planner or worried about saving for retirement. Had they even spent a small amount of time earlier in life with a financial planner, they would have probably learned a few techniques which would have allowed them to hold on to more assets and still legally qualify for Medicaid.

Once on Medicaid, they were limited in their options. They were forced to choose only the care that Medicaid would cover, rather than what would truly make them comfortable in their finals years. Finally, when they passed away, the family was left with thousands of dollars worth of debt from medical expenses and funeral arrangements.

This lack of preparation is common. It happens every day to hundreds of middle and upper-income families across the United States, and it can easily be prevented with some basic planning. Rather than watch your life’s work slip away because of costly medical expenses, with just a little planning, you’ll you be able to leave a legacy behind that will make your family proud and secure. Rather than seeing your memories sold, you can hold on to the things you worked so hard to attain.

Long-term care planning doesn’t mean the end of your livelihood. It means taking a small amount of time to decide what options you and your family will have in the future. It means making sure you have something left to pass on to the next generation.

When is long-term care needed?
Long-term care is generally something to consider when someone can no longer perform basic functions themselves. Generally, it means they need a medical professional to assist them with various tasks. This can be as simple as getting out of a chair or as complex as cooking a meal or bathing. Both mental and physical ailments can bring about a need for long-term care including strokes and car accidents. Alzheimer’s disease is just one of the many mental conditions that requires extensive long-term care. According to the Center for Disease Control, 14.2% of all nursing home residents suffer from Alzheimer’s disease. This can be extremely costly and can destroy your financial security quicker than you think.

What long-term care options will I have?
Most people automatically think of nursing homes as the only long-term care options. While it is true that nursing homes account for a large percentage of long-term care, it’s certainly not the only option available and depending on your ability to perform tasks you may have a wide-range of options to choose from if you plan ahead. Insurance that helps cover costs of nursing homes, assisted living facilities and even in-home health care are all options that can be considered.

What’s the next step?
When deciding what type of long-term care planning you should do, it’s always best to consult with your closest family members. Once you have decided to pursue long-term care planning, there are various options available to you through the help of a trusted financial advisor.

With just a small amount of financial planning, you may be able to spend your final years in comfort and stability, without all the added financial stress and anxiety. Your family members will be able to spend time around you sharing their love and support, instead of dealing with debt and foreclosure. You will be filled with pride knowing that all you worked for is still intact. Just a small amount of long-term care planning could ensure that the dreams you achieved in life don’t disappear overnight.

And you may find that you are able to leave this world a little bit better than you found it.

Written by: Securities America, Inc. Distributed by: Lawrence D. Sprung.

COBRA Premium Subsidy Program Extended - December 30, 2009

On December 19, 2009, President Obama signed into law the Department of Defense Appropriations Act, 2010 (DOD) which extends the 65% COBRA premium subsidy to February 28, 2010.

The American Recovery and Reinvestment Act of 2009 provided a government subsidy of 65% of the cost of COBRA coverage for employees (and their eligible family members) who lost their health insurance coverage due to involuntary termination of employment in 2009. The subsidy was to last for up to 9 months. The DOD extends the subsidy to 15 months and includes eligible employees (and their eligible family members) who lose their jobs in January or February of 2010.

This article was provided by Forefield and distributed by Lawrence Sprung.

Electing Early Social Security Retirement Benefits

You can elect to receive Social Security retirement benefits at age 62 instead of waiting until normal retirement age.

You want to optimize your Social Security retirement income, and:

  • You are at least age 62
  • You are fully insured for retirement benefits
  • You have applied for early retirement benefits by contacting the Social Security Administration

Key Strengths

  • You will receive more benefit checks, making your lifetime benefit potentially greater than if you wait to receive benefits until normal retirement age. See Tradeoffs.
  • You can invest some or all of your Social Security benefit

Key Tradeoffs

  • Your retirement benefit is permanently reduced
  • You will have less chance to increase your average indexed monthly earnings
  • You may outlive the financial value of receiving early retirement benefits
  • Your surviving spouse's benefit may be permanently reduced
  • Your total family benefit may be especially limited if both the early retirement reduction and the family maximum apply

Variations from State to State

  • None

How Difficult Is It to Implement?

  • For information on how electing early retirement benefits will affect you, you can order a Social Security Statementfrom the Social Security Administration.
  • To apply for early benefits, contact the Social Security Administration two or three months before your 62nd birthday (or the date you want to begin receiving benefits, if later). Visit a local office or call (800) 772-1213.
  • For investment options or retirement planning advice, contact a financial professional.

This article was provided by Forefield and distributed by Lawrence Sprung.

Happy Holidays!!!

To everyone,

Whatever holiday you celebrate I hope you enjoy your holiday season. We at Mitlin Financial would like to also wish you a healthy, happy and prosperous 2010!!

We will be back Monday, January 4, 2010 with a new posting. Till then enjoy this time with your family and friends!!


Mitlin Financial, Inc.

The Worker, Homeownership, and Business Assistance Act of 2009

On November 6, 2009, President Obama signed into law the Worker, Homeownership, and Business Assistance Act of 2009 (the "Act"). The Act provides up to an additional 14 weeks in benefits to unemployed individuals. An extra 6 weeks of benefits is available to individuals in states with unemployment levels over 8.5 percent. The legislation also includes the following provisions:

First-time homebuyer credit

The Act extends and modifies the first-time homebuyer tax credit. Specifically, the Act:
Extends the first-time homebuyer credit to principal residences purchased before May 1, 2010. The credit is extended to principal residences purchased before July 1, 2010 if a written binding contract is entered into prior to May 1, 2010.

Increases the income limits that apply to the credit. For the purchase of a principal residence after November 6, 2009 the credit is reduced if modified adjusted gross income (MAGI) exceeds $125,000 ($225,000 if married filing a joint return) and is completely eliminated if MAGI reaches $145,000 ($245,000 if married filing a joint return).

Establishes a new limitation: effective for purchases made after November 6, 2009, the first-time homebuyer credit is not available if the purchase price of a principal residence exceeds $800,000.

Expands eligibility (purchases made after November 6, 2009) by allowing some existing homeowners to qualify for the credit when they purchase a new principal residence. Specifically, an individual (and, if married, the individual's spouse) who has maintained the same principal residence for at least five consecutive years in the eight-year period ending on the date that a subsequent principal residence is purchased, will be considered a first-time homebuyer for purposes of the credit. In such a case, the maximum amount of the credit is $6,500 ($3,250 for a married individual filing separately).

For purposes of the credit, in the case of a purchase of a principal residence after December 31, 2008, a taxpayer may elect to treat the purchase as if it were made on December 31 of the calendar year preceding the purchase for purposes of claiming the credit on the prior year's tax return. This means qualifying purchases in 2009 can be treated as if they were made on December 31, 2008, and qualifying purchases in 2010 can be treated as if they were made on December 31, 2009.

The Act also imposes additional new limitations on purchases made after November 6, 2009:

No credit is allowed unless the taxpayer is 18 years of age as of the date of purchase. A taxpayer who is married is treated as meeting the age requirement if the taxpayer or the taxpayer's spouse meets the age requirement.

The definition of purchase excludes property acquired from a person related to the person acquiring such property or the spouse of the person acquiring the property, if married.

No credit is allowed to any taxpayer if the taxpayer is a dependent of another taxpayer.

For tax years ending after November 6, 2009, no credit is allowed unless the taxpayer attaches to the relevant tax return a properly executed copy of the settlement statement used to complete the purchase.

The Act also includes special provisions for members of the uniformed services and others who receive government orders for qualified official extended duty service. These provisions include extended time to claim the credit.

Five-year carryback of net operating losses

The American Recovery and Reinvestment Act of 2009 allowed eligible small businesses to elect to extend the general two-year net operating loss (NOL) carryback period for 2008 net operating losses to three, four, or five years. An eligible small business was defined as a taxpayer meeting a maximum $15,000,000 gross receipts test. The provision applied to an eligible taxpayer's NOL for any taxable year ending in 2008, or if elected by the taxpayer, the NOL for any taxable year beginning in 2008. However, the election was allowed only with respect to one taxable year.

The Worker, Homeownership, and Business Assistance Act of 2009 provides for an election similar in nature to the NOL carryback provision in the American Recovery and Reinvestment Act:

Businesses may elect to extend the general two-year NOL carryback period to three, four, or five years.

The election is not limited to businesses that meet a specified gross receipts test.

The election can be used for an NOL for a taxable year beginning or ending in either 2008 or 2009. The election can be used for only one year, however.

Under the terms of the election, NOLs carried back five years would be able to offset up to 50 percent of the taxable income from the fifth year, but could offset all of the income from the other carryback years.

Eligible small businesses that elected to carry back 2008 net operating losses under the provisions of the American Recovery and Reinvestment Act of 2009 can still elect to carry back a 2009 NOL under the provisions of this Act.

The Act specifically excludes certain taxpayers. For example, a business in which the Federal government acquired an equity interest pursuant to the Emergency Economic Stabilization Act of 2008 is not eligible for the election.

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